UK – The Pension Protection Fund could take a 10% stake in insurance broking group Heath Lambert in return for taking on its pension fund deficit, according to reports.

The move has been slammed by the opposition, who called it nationalisation by the back door.

The Daily Telegraph reported that the PPF would take the stake as part of a deal for taking over the £210m (€313.6m) deficit in the firm’s three final salary schemes.

It said a deal has been agreed with the Pensions Regulator under which the schemes have applied for entry into the PPF. A PPF spokesman was not immediately available to comment.

The move would ensure that existing pensioners continue to receive their benefits while other members will be paid a pension of 90% of what they expected – up to a £25,000 cap.

Nigel Waterson, pensions spokesman of the Opposition Conservative party said: "This looks very much like 'back door nationalisation' and is not how the recent pensions legislation was sold by ministers.

“Can it really help to secure British pensions generally to take shares in companies which are already troubled by pension problems?

"How long will it be before we see this public body owning chunks of household names like Boots, Marks and Spencer or British Airways?"